Japan’s Corporate Service Price Index (CSPI) rose 3.6% year on year in July, accelerating from 3.2% in June and reaching its fastest pace of service-sector inflation in decades, according to the Bank of Japan. Higher costs in transportation, leasing and information services, along with the pass-through of labor and raw-material expenses, drove the increase. The CSPI tracks prices paid by companies for services such as advertising, software development and machinery repair, making it a key indicator of business-to-business inflation and a leading signal of wider price pressures. The data strengthens the case for further Bank of Japan tightening after the central bank ended its negative interest rate policy in March for the first time in 17 years, although policymakers remain cautious because of the fragile economic recovery. Rising service costs could pressure business margins and eventually lift retail prices, reducing household purchasing power. Economists say the durability of the increase remains uncertain if domestic demand weakens, while the Bank of Japan’s upcoming quarterly outlook report may provide further clues on the inflation outlook.